24 months of F.I.R.E

Time really does fly by in a blink of an eye. 

It has been more than 2 years since my F.I.R.E journey began, which makes it a good time to evaluate the evolution of my journey, especially over the last 12 months. This post can be read in conjunction with my reflections of the first 12 months of my post F.I.R.E journey for a more holistic view.

Here's a friendly notice upfront that this is going to be a long read. 

What have I been up to since 1 September 2019?

Travel

The tail end of 2019 passed really quickly, and a large part of it was spent overseas. I spent about 2 months or so in southern and middle Italy and Istanbul from end September to end November, and about 10 days in Kluang for a Chan meditation retreat during the early part of December. 

Was in Malacca for a buddy's wedding in end December, and spent half a week in Bali to celebrate my partner's birthday in February, which was the last time I set foot overseas since. Kinda helped that one of my aims during the 2nd year of F.I.R.E was to ground myself more, which meant less travelling and more day to day normal living.  

Diving

I started the PADI Divemaster program in September 2019, and just managed to complete the course requirements over the last two weeks. Given the stop start nature of things, what could have been be a 3 week full time course took close to a year to complete in earnest. It was a great course with loads of learning, and I spent quite a lot of time diving in Pulau Hantu, with the highlight being a clean up trip at Sisters' Islands. I didn't realise how diverse Singapore waters are, and some of the coral and marine life here are certainly sights to behold.  

While I now have an option to help out in professional teaching and guiding for a very small fee, I don't think I'll be doing that much going forward, given the low payoffs involved. 

But one thing is for sure - I've grown very much to love diving, and I can imagine it being something I'll enjoy during this lifetime. 

Yoga

Signed up a 1 year membership since I got back from Europe last year and have been continuing to attend classes. In a bid to further develop my practice, I had signed up for a 200 hour yoga teacher training program originally scheduled for June 2020, but it got cancelled given the COVID-19 situation. 

I still practice on a regular basis, and I do feel it has helped me with increasing my flexibility and body strength, with added balance to my mind.  

Aside from the above, of course there was the normal day to day relaxed living, spending time with my partner (who started to embark on her own freelance writing journey since coming back from Europe) and loved ones, gaming, reading, watching Netflix, meditation, just generally chilling and.... 

A return to (part time) work

I guess you folks can call the Internet Retirement Police (IRP) on me and flip me the finger, because I've returned to work. Well, that's part time employment to be exact. 

COVID-19 hit our shores in 1Q20, and the sense of foreboding, slowly but surely, came true. To be frank, I didn't quite expect the fallout we are seeing now (and that is yet to come), but it didn't really affect me financially. I was still chilling and living my F.I.R.E life. 

In late March 20, shit really started to hit the fan in Singapore and contagion started spreading globally like wildfire. That was also the time when I got really lucky - an opportunity presented itself where I could work part time for a financial institution to help with structured debt transactions, given the scarce supply of liquidity in the global markets, and the heightened demand for it led to more deal flow coming in.

It was very much a consulting role, where I didn't have to quarterback any transactions, and I could work largely according to my own schedule. 

The increased probability of a lock down then, the desire for further "professional intellectual stimulus", other positive externalities, coupled with considerable incoming cash flow that could potentially help with mortgage financing, made it a no-brainer to take on the role.

It's been more than six months now that I've been doing this part time gig. I've put in more than 220 hours of services, helped to look at some potential transactions and closed 2 transactions with the firm. 

All in all, putting aside the cash consideration, it has been a good gig and use of my time. Learned quite a number of things about different geographies and new ways of thinking, and I must say that I quite enjoyed the work, where a large part of it was desktop analysis of different potential investments. It certainly did have its stressful moments, but it has been an interesting endeavor where I felt like I really used my brain and could apply some of the expertise that I had gained in my professional life. 

However, I don't think this part time gig is going to be a staple in my life going forward. 

Times are bad and that led to crunch time for the firm. Where there are bodies, there will be vultures. And there were loads of bodies then. But eventually things will normalize, especially when investment targets have been met.

I must say that I was actually quite surprised that I quite enjoyed working again, at least on this part time basis where there was a good level of autonomy and ability to control my life, and perhaps doing some kind of work which combines meaning and autonomy might be something I could look to in the future.

Financing my F.I.R.E lifestyle

After 2 years of F.I.R.E, I would like to touch on personal finances. Aside from the monthly expenses budget of S$4,000 that I've shared, I notice I had not delved much into my F.I.R.E retirement budget planning, so perhaps this is a reflection on plans vs reality.  

Back in March to May 2018, I did the math and decided I could F.I.R.E with passive income of 1.93x cover of expenses and the basis of a small out-performance of investment returns against expenses. To be conservative, I set aside 4.75 years of expected expenses in highly liquid resources (think cash, fixed deposits, etc.), that was separate from my investment portfolio, just in case you know shit hits the fan and what not, resulting in negative sequence of returns and a potential mandatory conscription back to full time employment. 

To be honest, I expected my investment portfolio to be generating solid returns, like it had been since day 1, but I thought it's better to be safe to have some cash stockpile to draw down from, instead of tapping the investment portfolio straight from the get go. 

Well... let's just say value investing not being in vogue over the last 2 years and the COVID-19 crisis playing out have largely led to an investment return of negative 6.2% per annum since 31 Aug 2018. In layman speak, my invested portfolio has decreased by 11.9%. 

This basically meant that if I didn't F.I.R.E with sufficient cash stockpile to draw down immediately from, and if I had lived YOLO outside my budgeted expenditure, I think it would have translated into looking out for full time employment really soon, which would have been a double whammy given the economic climate and retrenchment numbers. And it will undoubtedly, be extremely hard to get full time employment on decent terms in this market. 

You would think with 4.75 years of cash stockpile, seeing your investment portfolio suffer a decrease of 11.9% wouldn't have much of an impact on your well being. That's quite true at this point, but I'm speaking as of the point of 31 Aug 20. 

To encapsulate the point, as of 31 March 20, my invested portfolio was down 22.7% from 31 Aug 18, and my cash stockpile was 3.56 years, and that was because I had received an unexpected small inheritance. If not, my cash stockpile would have been 2.38 years. To say I wasn't even a wee bit concerned then would have been a massive lie. 

I rationalized with myself that I still had a good amount of time and could probably cut expenses to get some more time to returns to normalize. However, that took some effort to come to, and the thought of having to sell off my investments at depressed valuations to fund life requirements certainly caused some pain. 

It's like I could probably run 2.4km in 10 mins 30 seconds, but that's going to be painful and probably something I'll like to refrain from unless absolutely necessary. Same logic to liquidating my invested portfolio below original or at depressed valuations to fund life requirements, but the envisaged pain is real in my mind. Separately, it was definitely through the last six months or so that I realised I have a wee bit of an unhealthy attachment to my investment portfolio that needs to be managed.

Eventually post self rationalization, I decided that the increased market volatility presented an opportunity to good to pass, and set aside USD30,000 to do some short to medium term trading in a bid to capitalise on returns. That's doing fine (up 15% or so), though my main invested portfolio is still down 11.9%, I'm not too worried given the Asia Pacific equity market sans tech is still undervalued and I believe that will revert to the mean eventually; and I now have increased my cash stockpile to 6.60 years given income I've received from my part time gig. 

It's all good at this period of time, but looking back, I got really lucky in 2018 to get my retrenchment benefits that led to having an initial cash stockpile of 4.75 years, and receiving a unexpected small inheritance in March 2020 definitely helped, otherwise I might not have made the same decisions that I made in the last 2 years. 

TL;DR - it is absolutely necessary to have a sufficient amount cash stockpile (or other means) to prevent negative sequence of returns from kneeling a death blow to your F.I.R.E life. 

Purchasing a Property for Consumption

I'm turning 35 at the end of the year, and that means having access to purchase a resale HDB for own consumption soon, which was part of my original plan. Because every man needs his own space :)  

Living a F.I.R.E life means having limited access to mortgage financing, so my plan was to liquidate investments and fully use up my CPF to purchase a property sometime in 2021, which well added to a bit of my phantom pain when I had to think about this during the market meltdown in 1Q/2Q20. 

That was the original plan, and has since been subsequently redrawn as my partner came into my life shortly after I embarked on life post F.I.R.E. After over a year plus of dating, we decided we were going to be committed partners for life (at least in this life), and decided to ballot for the build to order flats by HDB instead given we qualified for it, and well, why waste the government's gift to its citizens? 

Only impediments were a decent queue number and the mortgage financing. 

Balloting was the straightforward part. Pony up S$10 for a ballot and leave it to chance. We went for two rounds of balloting and just received a decent queue number this time round. So hopefully we get to select a decent unit that we like this time round. 

Mortgage financing while F.I.R.E

Obtaining mortgage financing was the trickier bit. We're both freelancers and have come into the self employment in recent times. She has been doing freelance work since Nov 2019 and I just started in Mar 2020. Meaning our tax assessment for FY2019 showed her as full time employed and me as unemployed. 

My mortgage financing strategy since Feb (when the BTO process started and we started looking at resale units too) was to engage various mortgage brokers and banks directly since HDB requirements were for 6 months of self employed income. 

I wanted to see if it was possible to get asset based financing given income based financing seemed unavailable to us. Well, let's just say to purchase a S$[750]k flat, you needed to either show about c. S$[1.2]m of cash during the period between offer letter issuance and draw down (4 months or so), or a mix of showing [x] amount and taking on fixed deposits for 4 years. 

I have the numbers written down somewhere, but I'm bit lazy to go and dig, so the above number is from memory and might have changed given the mortgage rates have come down. 

But taking bank financing meant a lower LTV of 75% and (1) having to liquidate my investments to show cash and be stuck for a couple of months, which to me was a bad idea, or (2) taking some form of cash backed financing, which was another bad idea given the need for me to be fully invested in appropriate return investments. 

And for income based financing for freelancers, the banks strictly rely on what is declared to the tax man in the previous year, and they apply a hair cut of 30% to that. So that means we were ruled out on that basis given we only started freelancing recently. 

In short, the bank financing process for us came to a screeching halt, at least until we receive our tax notices for FY2020 in 2Q21. 

However, if you are getting a HDB property, you could always get HDB financing - this gives you a up to 90% LTV at CPF OA rate + 0.1% (2.6% p.a presently), and the HDB financing will be available for 6 months from letter issuance. 

For BTOs, once you get a valid HLE for flat selection, this will last you all the way through the signing of lease agreement (4 to 6 months after flat selection) till 6 months before you get your keys (about 4 to 6 years from flat selection), where income is then reassessed and the loan is then disbursed at keys collection. 

So we tried that route, and started to get our paperwork in order. For self-employed persons, HDB requires the last 6 months of your self-employed income, and that means you have to be self-employed for at least 6 months, and they are very strict about this. 

I know this because I applied when I had 5 months under my belt, and they didn't count my income. Thankfully I re-applied shortly when I had 6 months under my belt, and they managed to provide us with full LTV for our targeted BTO purchase.

I was prepared to fully draw from CPF and liquidate investments to purchase a resale. But a mortgage really helps with managing my finances in a more efficient manner, and I'm really grateful that things worked out and we managed to get mortgage financing sorted for a HDB purchase until 1Q21. Fingers crossed that we can select a unit of our desired choice soon, whether it is a BTO or a resale. 

TL;DR - Unless you have plenty of cash reserves that you can pledge / show to the bank where you don't need that for investment return to generate your living expenses, please sort our your mortgage financing and property purchase before you call it a day and F.I.R.E. Otherwise you're going to have to jump through hoops or get lucky. 

Closing Thoughts

I wrote about the dark and bright side of my F.I.R.E journey about 12 months ago. 

12 months have passed and it's still really pretty much the same, but I must say that some of both the bad and good points have begun to have less of an impact on me. 

On the dark side, I don't quite see the "conformist questions" and "loss of identity" issues any more these days. Although "loss of community" is still there, but somewhat negated because of my part time gig. 

On the bright side, "off peak" is nice, and is still nice. But when quite a sizable proportion of the population have been working from home since February or so till today, and that is going to be the status quo at least for at least the next few months, being able to do things "off peak" loses some of its gloss. 

And I'm not even mentioning the extended lock-down over that couple of months which equalizes "off peak" and "peak".   

That said, looking at both the dark side and bright side, I'm really grateful to be able to have this F.I.R.E experience over the last 2 years. Especially so, given my original intention was to actually leave the bank in 2020 to do some exploration. No prizes in guessing how limited that exploration could have been right now. 

Presently though, I do feel a pervasive sense of stagnation and intellectual frustration. 

It is as if I've hit the pause button on growth overall, even though I do think I've developed in other areas (say spiritually and emotionally). The loss of community where I get insights and intellectual stimulation from, while supplemented by my part time gig, also actually accentuates my desire to find something that can provide that on a more permanent basis. 

So perhaps there is a need to find a full time gig that can give me personal autonomy and some kind professional growth and intellectual stimulation? Let's just say I'm not closed off to this idea if the right opportunity surfaces. 

Anyhow, that's just some food for thought. What I'm particularly looking forward to in the next 12 months is to building a life with my partner, and a home together. These are really exciting times, COVID-19 or not, and I intend to make the best use of them.

Best wishes to all readers, especially if you've managed to finish this monster of an article. 

Wishing you best of luck, and may you have the resilience, strength and daring do to pursue your dreams and happiness even in tumultuous times like these. Cheers. 

Expenses - August 2020

 

Total - S$3,022.91

Righto. August 2020 saw total expenses amount to S$3,022.91, coming in at 75.6% of budgeted expenditure. 

"Eating Out" was of course the largest category at S$1,260.45. Some of the more memorable experiences include Ginett Wine Bar and LINO. Brought the folks to try the latter given it left a solid impression on me in July. Of course, went back to my usual haunts such as Wildfire Chicken and Burgers. I sincerely hope these guys take off, given the value to quality ratio there. 

"Gifts" came in second at S$789.06. Contributed some monies for my mom to hire a domestic helper given her old age. This went towards agency fees and stay-home-notice fees. Guess you got to do what you got to do for that. Bought pops some walking shoes and separately, a decent birthday meal for a bro. 

"Motorcycle" rounded up the top three at S$241.62. Basically spent some money on safety equipment such as helmets and rain gear. Haven't quite changed out my helmet since 2015 so thought it'll be a good time to switch things out. And rain gear has come in handy given I've been caught in the rain more than once now. And the maxi scoot has storage space so it's a no brainer to purchase as a contingency act. 

Definitely a heavier expense month than normal in recent times, but it ain't an issue given it's coming in within the monthly and annual budget for my 2nd year into F.I.R.E, so no biggie there at all. 

Motorbiking Ownership Experience in Singapore - Moving on to a Maxi Scooter

Following the sale of my 8 year old KTM Duke 200 in July 2020, I thought it was going to be the end of my motorcycling experience for the foreseeable future. 

Especially with motorcycle COE prices at S$7,000 to S$8,000, which is more than the machine price of the large swathe of class 2B and class 2A bikes, I thought it did not make much sense to own another two wheeler, given my limited intended mileage and the high maintenance experience that I had riding the KTM Duke 200. 

However, idle minds are the devil's playground eh. After twiddling around on some motorbiking forums, and trying to delay any purchase decisions, I decided to look around to see if I could get a good deal on a 2nd hand bike. 

Specifically, after receiving recommendations from some friends and from one of the comments received in the earlier blog post detailing the sale of my KTM Duke 200, I started looking around for 2nd hand maxi-scooters on SGBikeMart. Because increased storage space, twist and go, comfort and convenience began to appeal to me more than the conventional motorcycle riding experience. I guess age plays a part too :) 

I spent a couple of weeks looking through the available inventory, and following a failed negotiation for a 2013 SYM JoyMax 300, I found myself looking at a listing for a class 2A scooter. It was a c. 270 cc scooter by a reputable Taiwanese manufacturer (think KYMCO or SYM). After some back and forth with the seller, I went to view the bike, loved it, and managed to wrangle out a decent deal. 

Ponied up about c. S$9,400 in total post servicing, and after factoring in the c. S$4,500 received for the sale of my KTM Duke 200, this works out to be c. S$600 per annum for an upgrade of my experience and an extension of 6 more years to my original COE which was supposed to expire in 2023. 

Given this, and that a brand new bike of the same model would have cost me c. S$15,500, I reckon it was a deal that was too more than sweet enough to go through with even if I were to utilise the bike on an occasional basis.

How has the Maxi-Scooter riding experience been so far?

So I'm about 1+ month into my maxi-scoot experience and it has been nothing but awesome. Fantastic comfort and good mileage so far. I've put c. 600km or so on it and I love the increased power, convenience and comfort as compared to my KTM Duke 200. A full tank is 12l, costs c. S$20 and can yield 330 to 360 km per tank. I think I'm becoming an Uncle :) 

Tips for a 2nd hand motorcycle purchase

Anyhow, here are some thoughts to round up my purchase experience. Hopefully they might be of some help to any readers looking to purchase a 2nd hand motorcycle in Singapore. 

1) Take your time to scout for and view 2nd hand bikes. The longer you take, the more options you have. Don't go for the first bike you see. Also, I dealt directly with individuals selling their bikes, not with dealers. My hypothesis is that there are good deals to be found on either side, but individuals might have more flexibility with pricing. 

2) Everything is negotiable. The price you see on SGBikeMart is just the opening price. Knowing why your seller is selling the bike, seller's profile, bike condition, etc, will go some way in helping you to negotiate for a better price. 

3) It might make sense to go against the grain. I think I got this on the value side also because it wasn't a very popular model. The current trend for maxi-scooters in the Class 2A category is the Xmax 300. However, that comes with a premium. Given my lack of height, I think I wouldn't be able to straddle the Xmax 300 confidently as my feet couldn't be planted flat on the floor while the bike is at a standstill.   

4) Luck plays a huge role. I got lucky this time round - the bike was supposed to be sold to another guy in March, but circuit breaker came into play and he wasn't able to deliver the cash and collect the bike. And I met a seller who was generally easy going and just wanted to get rid of it. He wasn't looking to maximize sale price. 

5) It's quite straightforward to switch ownership through e-LTA now using SingPass. My last 2nd hand bike purchase required both seller and buyer to head down to Sin Ming to consummate the sale in person. However things have changed since. For my recent purchase, I gave the seller a small deposit upfront to firm up my interest. Waited for him to repay his loans fully and release the bike for ownership exchange, went down to collect the bike and do the remaining purchase price / ownership exchange through internet banking and e-LTA. The wonders of technology. 

Hope this post is of some use. 

To all readers who ride, ride on, and ride safe. Enjoy the weekend! 

Expenses - July 2020

 

Total - S$8,100.83

A massive expenses month in July 2020, where total expenses amounted to S$8,100.83.

Largest category was "Motorcycle". Spent S$5,476.60 there. I reckon I should do a separate post on this, but the bottom line is I traded in my old bike for a less old scooter with higher engine capacity and extended my COE expiry date by 6 years. 

Second largest category was "Eating Out" at S$1,306.60. First real month of being able to head out to restaurants and boy did we have some good meals out. Some more memorable ones that came to mind was Burnt Ends, Lino and Wildfire Chicken and Burgers.  

Lino is a new casual dining concept by the Les Amis group - I guess faster asset (table) turnovers and higher margins compared to fine dining makes for an increased desirability to branch into this market segment. Bottom line is that the pizzas are great and they have some good promotions going on there. For Burnt Ends, I think it's overpriced, but was an experience anyhow. Wildfire Chicken and Burgers - hot damn this is the shit - muchas satisfaction for BOTH tastebuds and wallet. 

Third largest category was shockingly "Alcohol"  at S$504.45. Bit too high there, but I guess some wine and whisky purchases and mortini happy hours do add up unknowingly. I think this should taper down drastically over the next few months but let's see. 

July expenses came up to 202.5% of my monthly budgeted amount of S$4,000. A substantive part of it was a one time "capital expenditure" for my motorcycle, and removing that brings it within boundaries. However, even if I include that (which I should given it's actual cash spend), I'm still tracking comfortably below my budget. 

I've got total spending numbers out for my entire 2nd year post F.I.R.E (running till end August 2020). I'll find some time to post about that and thoughts on my 2nd year post F.I.R.E soon. 

Expenses - June 2020

 

Total - S$2,150.73

June 2020 saw Singapore head into Phase 2 of reopening post circuit breaker measures, which meant the lifting of certain dining in curbs and socialising prohibition measures.

This led to a slightly higher increase of monthly expenses to S$2,150.73. Though if you take out a one-off annual expense of S$742.67, this is S$1,408.06 instead, which is roughly in line with May 2020's numbers. 

Largest category was Insurance premiums at S$742.67. This was attributed to my H&S insurance with Prudential. I purchased this insurance back in 2014, and have saw premiums exponentially creep up. At this point, given I have the policy riders where it's nil co-pay and nil (or limited) excess in place, I've decided to keep this for the time being, as I understand these riders have been discontinued due to blatant abuse going on over the last couple of years. 

Second largest category was Eating Out at S$652.17. Managed to satisfy some dining out cravings when Phase 2 came into play towards the end of the month, thus the slight creep from May 2020. 

Third largest category was technology at S$372.89. Bought myself a set of wireless earbuds and wireless mouse and keyboard. Also purchased a small toaster oven for the family. 

I burned through 53.8% of my monthly budget of S$4,000 this month. Guess all the savings are coming from the lack of spending on travelling and I do believe there might be room to lower the budget on a sustained basis but let's see. 

In any case, I'm pretty sure I'll end up with a lower annual spend for the 2nd year of F.I.R.E as compared to my 1st. 

 

Expenses - May 2020

 

Total - S$1,248.38

1st whole month of the circuit breaker and it shows in the expenses! 

Total expenses for May 2020 came up to S$1,248.38 and this was done in the context of living life pretty large during the circuit breaker phase, well... as large as living can be done at home. 

Largest category of expenses was Eating Out at S$542.04. I have to clarify that this was really doggy bagging food back for the family, ordering in, and sending food as "gifts" over to my partner who's staying with her parents. 

Second largest category was Self Improvement at S$246.24, as I spent S$240 attending a introduction to positive psychology course, which I found pretty interesting and helpful. 

Third largest category was Alcohol at S$175.80. I certainly stocked up sufficient amounts of beer and whiskey to tide me through the month. 

I spent about 32.1% of my monthly budget of S$4,000, which is very much an all time low during a time where I stayed solely in Singapore. And I was really happy during this period. This reinforces my belief that very little is required to have a good life, circuit breaker or not. 

In any case, I do hope you folks are tiding through these COVID-19 times in good stead. If you are facing problems, hang in there and fight the good fight. Do remember, anicca - it too, shall pass. 

Economics of my motorbiking ownership experience in Singapore

I recently sold off my 8 year old KTM Duke 200 motorbike and thought it'll be good to do a reflective post on this, in a bid to explore quantify the economics of my motorcycling experience. 

I purchased my motorbike in 2015 for a cool S$9,000 or so and held it for just over five years. It was a 3rd hand bike that had seen probably only 7,000 km or so of mileage over the first three years of its lifespan, given the profiles of its previous owners - an expatriate and another professional who used it mainly for weekend riding. At that time, the purchase price was a real bargain for me, given the seller was a friend who was looking to move on the motorbike as he was looking to relocate. If I recall correctly, a brand new KTM Duke was around $14 to 15k or so at that point in time. 

Over the last 5 years or so, I've spent close to S$4,700 on motorbiking expenses. These include petrol costs, maintenance costs, ancillary costs (vehicle inspection, insurance, topping up of the cash card, purchasing locks, gear, covers, etc). Majority of these expenses (c. 70% or so) are allocated to the maintenance aspect, and this was probably because I didn't ride as much as it necessitated. 

Strangely, the mechanics have told me that the motorbike (or at least this particular brand KTM) requires frequent enough usage, otherwise it'll see a enhanced deterioration of its moving parts and other integral systems. Basically I had to replace a substantial number of integral parts over recent years, but the engine was still in tip top shape. 

I managed to sell the motorbike for about c. S$4,500 with a little over 2 years left on the COE. So the net cost of 5 years worth of motorcycling was c. S$9,200, or c. S$1,850 per year of use. The total mileage over my ownership period was about 5,000 km, which could be characterized as meagre at best. 

Was it worthwhile? 

Given I was the rare motorcyclist and didn't quite exact the full advantages my motorcycle had to offer, I gather that for the price of S$1,850 per annum, it was a really good thing to have on hand for the convenience and experience that it offered. 

Frankly, I think the costs wouldn't have increased by much even if I had put more mileage on it, and the maintenance costs can possibly even be lowered by going to a cheaper workshop. I hadn't quite bothered and got it serviced at the original dealer workshop Dirtwheel, was was rather pricey.

For the adventures and experiences that it had given me, I don't have any regrets from owning a motorcycle over the last 5 years. In fact, it was a great experience. However, I've discovered that I don't quite like to own things given the maintenance aspect - you've got to take good care of your stuff and send it for regular servicing, upkeep and general maintenance (like recharging the battery, or taking it out when you go for a long holiday etc etc.), and this is even more challenging when you don't quite utilize the asset in question. 

There were many a time at the start where I wanted to use the bike but realized the battery had gone flat, or the tyre was out of air, or the side stand sensor didn't work, and I had to get the bike towed to the workshop. I did pick up some basic motorcycle maintenance skills over the years, and these problems abated, but still my infrequent use of the motorcycle probably didn't warrant me owning one, or at least this model which required some loving tender care. 

One thing I might have done differently was to probably own a motorcycle that was low maintenance, say like a class 2A scooter (Yamaha XMAX 300) or some sort that came hassle free and with copious amounts of storage space that'll still afford me the convenience factor sans the "wow" factor. 

Perhaps that is something I'll consider next, but with COE prices at S$7,702 presently, I guess I'm gonna stick to public transport and grab rides. Indeed, that will perhaps truly be fuss free, especially during off-peak times :) 

Expenses - April 2020

Total - S$3,910.27

Total expenses in April 2020 came up to S$3,910.27, at c. 97.8% of budgeted amounts. 

Largest category was gifts at S$2,223.00. This was largely attributed to a purchase of an iMac for my partner, given working at home full time on a laptop screen generally leads to squinty eyes and optical degeneration. 

And with the circuit breaker in play, Groceries came in second. Enough said on this. 

Third category was Eating Out. This is basically takeaway / delivery food items, with one massive memorable meal at New Ubin Seafood a couple of days before we received notice of the circuit breaker being imposed on us. That was absolutely delectable. 

Special mention to the fourth category - Alcohol. Haven't seen this level of alcohol expenditure for quite some time, and this could be largely attributed (at 66% or so) to a one time purchase of certain quality wines that were being sold at massive discounts, possibly due to a rush to clear inventory given the dire economic situation. I've opened a few bottles of them and they are seriously of high quality to price. Good value. 

This month was pretty much another example of what retired life looks like, especially when there are no travel plans being put in play, and one has to stay at home most of the time. Sans a one time expense for gifts and donations (had donated some part of my short term trading gains), the "steady state" expenses was at c. S$1,500 for daily expenses and this is in my opinion living quite large. 

Of course, there is rent / mortgage, or in my case parental allowance / separate home contribution allowance, that I've left out in my spending reports given the fixed fee nature of it, but that has been factored into my own drawdown / budget analysis. 

I reckon May will plumb new depths of low spending. As of 29 May, I'm barely hitting S$1,300 all in, and this is before write backs of certain expenditure incurred over the past few months given refunds due to cancellation of certain activities. 

Perhaps I should do a post on what I've been up to over the last couple of months given the COVID-19 situation has been put in place, but that's another story for another day. 

Hope all of you reading this are holding up well, and if not, just know that this current situation, like all others, is impermanent and it will pass as well. Take care, and be happy! 

Expenses - March 2020

Total - S$2,132.90

Total expenses in March 2020 amounted to S$2,132.90, which was roughly 53% of the budgeted amount. 

This month is probably the first month I've stayed at home for majority of the time, given the developing COVID-19 situation. 

Eating Out was once again the largest contributor to expenses at S$680.74, as we could still bask in the luxury of ding out. I remember I had a great meal at Wagyu Express around the Tanjong Pagar area sometime then. 

2nd largest category was Self Improvement at S$365.97. I had signed up for a 200 hour yoga teacher training course and 

3rd largest category was Gifts at S$337.70. I celebrated the birthday of one of my siblings and we had a good meal outside. Also gifted my domestic helper some monies as her birthday present too. 

Other items of note was the purchase of a Canon multi function laser printer that cost S$259.  

Temasek shows up for SIA with a fair deal for stakeholders

So we saw a strong showing in the Resilience Budget yesterday, and this unyielding effort is further seen in what has to be nothing short of a massive show of support by Temasek in Singapore Airlines. 

I was closing out my minor US trading positions early this morning when I saw the press release on CNA, and subsequently went through the SGX announcement. Please do point out and pardon me if there are any factual errors in my summary below. 

Key Transaction Highlights - Singapore Airlines Rights Issue and Convertible Bond Issuance

* Total immediate new funding of S$8.8bn, comprising S$5.3bn equity and S$3.5bn 10 year mandatory convertible CB.

* Another S$6.2bn of dry powder in the form of a similar mandatory convertible CB to be on standby

* All new funding to be fully backstopped by Temasek

Rights Issue – S$3.5bn

* 3 Rights Shares (at S$3.00 issue price) for every 2 existing SIA Shares, existing shareholders diluted to 40% of original shareholding if choose not to subscribe to Rights Shares
* Rights Shares to raise proceeds of c. S$5.3bn
* Theoretical Ex-Rights Price (“TERP”) of S$4.40 per share

* Discount to TERP of 31.8%

* Discount to Last Traded Price of 53.8%

Convertible Bond – S$3.5bn in immediate funds, with another S$6.2bn of “dry powder”

* Additional 10-year zero-coupon Convertible Bond (“MCB”) to be issued, notional of S$3.5bn, at 295 MCBs for 100 existing SIA shares, denominated at S$1.00 per MCB (but trading lot size of S$1,000)
* Conversion Price at MCB set at 10% premium to TERP – S$4.84, convertible only at Maturity at Accreted Principal Amounts (“ACP”)
* ACP of MCB:
- 4% p.a. within first 4 years of issuance
- 5% p.a. in next 3 years (year 5 to 7)
- 6% p.a. in subsequent 3 years (year 8 to 10)
- All amounts compounded on a semi-annual basis
* Issuer has call option on MCBs subject to payment of Accreted Principal Amounts, only to be exercised semi-annually from issuance of MCB
* No put option on MCBs for investors
* Issuer seeking approval for another S$6.2bn of MCB (at substantially similar terms) to be made available for issuance within 15 months from EGM approval date 

Potential Shareholding Dilution for Minorities – limited to only effects from this corporate action

* If you choose not to subscribe, on immediate completion of Rights Issue, you retain 40.0% your original ownership

* Post completion of Rights Issue and if new S$3.5bn MCB is converted in 10 years, you retain 28.0% your original ownership

* If a further S$6.2bn MCB is converted in 10 years, you retain 18.3% your original ownership

My thoughts

Whenever my friends and I talk about single stock investing in the Singapore landscape, the conversation invariably involves our esteemed sovereign wealth funds (GIC and Temasek), and somehow, someone will always come up with the idea that if you’re lazy, or at a loss of what to do, besides investing in index trackers, maybe you can just mirror what Temasek / GIC does. After all, given the intertwining of the business landscape between GLCs, Government and SWFs in Singapore, even if you get fucked, you won’t get fucked so bad. There’ll likely be some reprieve and most likely a decent ongoing yield.

While I have my own reservations on the investing methodology as described in the above paragraph, there is no doubt at all that the situation with Singapore Airlines epitomizes the above thinking. Look, I know bad is relative, at least your investment in Singapore Airlines won’t go to a big fat donut – congratulations you just got bailed out.

Temasek is certainly pushing out the boat here – backstopping S$15bn of funding for Singapore Airlines, but of course, there is no doubt that Singapore Airlines is a critical strategic asset that cannot afford to fail. If this fails, there is a high probability that our entire aviation sector will collapse like a house of cards. Just think about it – T4 was pretty much empty even before COVID began, and remember all the ancillary services that generates revenue from the servicing of aircraft, catering, etc? I’m not quite sure they can survive if the anchor tenant of Changi is gone.  

Now that we have answered the existentialist question of “to save or not to save”, the question is – what can Temasek do to provide a lifeline that will not make for bad optics (i.e. fucking existing minority shareholders, being called out by the public for spending inefficiently or in excess, etc)?

They could call for a general offer to take private Singapore Airlines. The upside is that no more having to deal with quarterly updates, answering to the public on why this why that, ease of doing more strategic moves, etc. But then there will be other issues like what acquisition premium to give, decrease of depth in an already thinly traded market, perceptions, etc.

They could do a direct primary share issuance with Singapore Airlines, or a convertible bond, but that would mean fucking over the minorities, especially long term existing shareholders who will no doubt be diluted down in shareholdings.

So my view is that this particular course of action, is right and fair for a situation of this nature at this point in time.

Why? Everyone has the right to participate equally in this. You have a choice to maintain your current shareholding percentage levels.

No doubt, there will be guys who will say fuck man, this is some nasty pricing going on – why couldn’t they price the Rights Shares better – less discount to TERP or Last Traded Price. Give some chance to the minority investor lah, value the company higher leh. Especially the long time shareholders who have been there before COVID struck, say shareholders whose purchase price was S$9.50 or more. In my humble opinion, the discounts to TERP and last traded price do seem to border on the high side. 

But then again, why should another investor do so? Especially one such as Temasek where they’ll be scrutinized by the general public in their every move. There isn’t any motivation to do that, after all they are in the business of generating investment returns too. Furthermore, if you can get in at a value price, why not? This is quite a decent deal for Temasek, and they have actually managed to wrangle some juice in the MCBs for the minority investors. 

As a minority investor in the MCBs - you get a 4% redemption premium at the very least, and this is compounded. This is better than the SIA dividend yield no? Albeit you’ll only get this in cash when the investor calls for it, or in shares at the end of 10 years.

If I recall correctly – this pricing levels make this debt one of, or if not the most expensive “debt” SIA would have on its book. It steps up after 4 years too, so this would probably be first port of call for any potential deleveraging. 

Next steps for Existing Investors?

FYI - I’m looking at next steps below through the lens of an existing investor only. As a new investor, a different lens is warranted given the amount of opportunities out there at the moment.

Entitlement of the Rights Shares and the MCBs will be listed and traded on the SGX. If you are not in a position, or do not want to subscribe to the Rights Shares or MCBs, please remember to sell those entitlements, so you can get at least some cash even though you’ll be diluted down to 40% from the get go.

If you only have some spare cash, subscribe to the MCBs for certainty of return, well at least as long as SIA is a going concern and I can assure you there is a high chance it will be – I suggest to take comfort in this action by Temasek.

If you have sufficient cash, I urge you to subscribe for both, or even take up excess rights (there is a provision for that). You average down your cost price, at least maintain your ownership levels, and get MCBs for some “income” return, or more SIA shares at the end of 10 years. Think long term – the Singapore Government cannot afford to let the aviation sector in Singapore fail, given the tremendous amount of investment already made. And Singapore Airlines is one of its prized jewels on that crown.

But whether that will translate into a healthy investment return for the existing investor – I don’t know for sure, but I can see a decent margin of safety at these prices.

Thanks for reading and I hope you found this helpful. Leave comments below!

Expenses - February 2020

Total - S$2,806.6

Total expenses for February 2020 came up to S$2,806.60.

Largest category was "Vacation". Spent half a week in Ubud, Bali during the earlier part of February to celebrate my partner's birthday. We're just thankful the timing seemed to work out okay, inspite of the overarching COVID-19 landscape then, and even more so now.

Second category was "Eating Out". Enough said about that. Only major expense in this category is attributed to a wine dinner with family and friends at our current favourite wine place.

Third category was "Diving". Was planning to head up to East Malaysia for some diving come mid May, but given the COVID-19 crisis escalating at the moment, I think this will have to be put on the back burner for the time being. That being said, I've still got to pay up for the trip.

So I ended the month at 70% of budget, which ain't too bad. I gather if I cut out most of the vacations and stay in Singapore, my steady state expenses will possibly only top S$2,000ish monthly. But let's see, given no immediate need to cut my budget in the near future :)

Expenses - January 2020

Total - S$3,166.32

Total expenses for January 2020 came up to S$3,166.32.

The largest category was "Motorcycle" - my motorcycle repair and maintenance job. I've an 8 year old KTM Duke 200 (class 2B bike) which I rarely use. That means high degradation of parts and voila, I came back to a faulty fuel pump and a nasty case of dried out rubber for some of my lights. Add a poor DIY job on the front brake fluid system, and normal servicing works (engine oil change, etc), this baby cost me S$849 for it to be put back on the road safe.

Strangely enough, the mechanic's advice was : "Bro you got to ride more, because this kinda bike if you don't ride enough it'll all get gunky and rough, then you'll have these kinda problems. These one can't be left alone for long. You want something you can just leave alone for awhile and continuously use - buy a scooter." Well, suffice to say, I've been putting in some mileage since then, though the weather has gotten drastically hotter over these two months. Anyhow, I've put up my bike for sale, so let me know if you come across this pseudo advert and would like to know more.

The second largest category was "Eating Out". Stayed in Singapore the entire month, so this definitely would be a top 3 category. Notable entries included paying S$70 for a Burpple Beyond membership, which I have not used yet, and also some wine dinners with my friends and family.

The last category was "Gifts". Chinese New Year came early this year, and I had to pony up for the customary ang pows to my parents, and domestic help.

In conclusion, I came in below the S$4,000 budget (79%) and have some surplus savings. There aren't any major plans to go traveling this year, so I reckon I can keep to well within the S$4,000 bogey. In fact, if there wasn't that major expense for my bike, I'll be hovering around the $2,300 mark, with no real focused cost cutting measures put in place yet. So all's good. 

Expenses - December 2019

Total - S$2,295.33

Total expenses for the month came up to S$2,295.33, which was surprisingly low for December.

Gifts was the largest expense, largely attributed to my attendance at a wedding right across the border as a groomsman for one of my buddies, and various Christmas / birthday gifts across the month.

The second largest category was Vacation Expenses, which was mainly attributed to across the border spending for the aforementioned wedding, given it was a mini vacation of some sorts for my partner and I.

Eating Out was the third largest category - there is only so much one can say about this. But this category was relatively lower in December compared to other months, as I spent a week on retreat across the border.

So I've spent about 57.3% of my budgeted expenses this month, which ain't too bad, and well within budget.

That being said, I expect to spend more in January 2020 as I send my motorcycle in for repairs / servicing, associated expenses for CNY (got to distribute some to my parents), and also front load a bit of expenses for a few other upcoming trips in 2020.

Managing your weight

Over the last few weeks, I had the good fortune to read a book called "The Obesity Code: Unlocking the Secrets of Weight Loss" by Jason Fung (M.D), which was published in 2015.

It has been some time since I read a book on physical health and weight management that was so good that I feel certain concepts it espouses could be more widely shared through a short blog summary.

The main purpose of the book is to find out exactly what causes obesity and to provide permanent solutions to manage it.

From the perspective of a 35 year old Singaporean male who spent 10 of his younger years as a former member of the Trim and Fit (TAF) club, where its name is by itself is a mockery of its esteemed members who are all overweight, I do feel that the suggestions put worth by the book are worthy of further consideration and experimentation.

What causes obesity?

There has been many suggestions from various sources on what causes obesity. Some of the more popular ones are: “calories in > calories out”; “too much carbohydrates”; “too much fat”, etc.

The author has suggested that instead of the traditional suggestions of the causes of obesity, the main causes are instead the increased levels of insulin, heightened insulin resistance and increased cortisol (stress hormone) levels, putting forth the argument that obesity is really very much a hormonal issue instead of the widely held belief that it boils down to ONLY personal discipline. 

So as long as one's insulin levels, insulin resistance and cortisol levels (“Factors”) are managed, one should be able to maintain a healthy weight / fat levels.

Essentially it boils down to what you eat, how often you eat, and how much stress is present in the body, as these points directly affect the Factors.

Solutions to obesity

The author has identified a multi factorial approach to tackling the obesity problem:

1.    Reduced consumption of added sugars

2.    Reduced consumption of refined grains

3.    Moderation of protein consumption

4.    Increased consumption of natural fats

5.    Increased consumption of protective foods (fiber producing foods, vinegar, etc.)

6.    Intermittment fasting

7.    Mindfulness meditation

8.    Sleep hygiene

My own weight loss experience from my younger years involved adoption of many, if not all of the solutions above, except that of solution 6, 7 and 8, which are new to me in the battle of the bulge.

I’ll touch on 6 for a bit. 

Folks who have undertaken diets before, be it low sugar, low fat, low calories / high output, etc might be familiar with a plateau in weight loss, or a nasty reversion to the original or increased weight levels.

What the author suggests is that one of the keys to unlocking the dreaded plateau or weight reversion is increased insulin resistance, where eating wrong over many years has resulted in needing more insulin to absorb similar levels of glucose, and a higher baseline level of insulin leaving us more ravenous,increasing the storage of glucose / glycogen / fat and decreasing the ability for us to burn fat.

In order to tackle increased insulin resistance, one can undertake intermittment fasting so the body has a chance to reset the “insulin baseline” and its resistance levels. The author advocates doing a 24 hour fast a few times a week, or a daily 16 to 18 hours fast / 6 to 8 hour eat timings, but the key is to eat similar level of calories, and of course healthy food that does not spike your insulin levels to the max.   

It doesn’t mean that because you only eat for 8 hours a day, once a day, or once every 2 days, that you can gorge yourself silly. In fact, there is a suggestion that following solutions 1 to 5 would lead to increased satiety such that one would naturally know when to stop when enough food has been taken in by the body. 

Parting thoughts

The book certainly leaves a lot of food for thought, and while the above isn’t a comprehensive representation of the book (there is much more meat that I have been unable to share in this summary), I do hope it has given you some inspiration to delve deeper and that it assists in the development of your personal health.

After all, health is wealth isn’t it?

Maybe intermittment fasting is really the key to getting the last few stubborn extra kilograms of fat off my body. I shall certainly endeavour to try this approach in 2020.  

Two Months in Italy - Living La Dolce Vita

I had the good fortune to spend two months in Italy with my partner during the last quarter of 2019. It was nothing short of an eye opener from many angles, of which the most relevant one to this blog would be that of cost and lifestyle arbitrage. 

We spent one month in the region of Puglia (southern Italy) and another in Umbria (central Italy), and the conclusion from a cost perspective is that living life in those regions in Italy is way cheaper than in Singapore. Here's a summary of the breakdown in costs. 

Airfare

S$915 per pax on economy class via Turkish Airlines, with a stopover of four nights in Istanbul. 

Accommodation 

This was c. S$1,750 per month for a private ground floor apartment with an adjacent outdoor space (garden / farm) through AirBnB. 

Indoor space was roughly 1,000 to 1,200 square feet, and outdoor space was so bountiful that I find it hard to put it down in numbers. We had long term stay discounts of up to c. 20%. 

One thing to note is that gas is charged separately during winter months in Italy. For our 2nd month in Umbria, it started to get pretty cold and necessitated the use of some heating. This cost an additional EUR80 for that month (c.S$120). 

Car Rental 

This was c. S$650 per month. The places we stayed at weren't exactly well connected by trains and public transport. It necessitated the use of a private vehicle. To minimize any chagrin from my partner, I decided to rent a private car instead of hitchhike, ride motorcycles or bicycles :) 

We rented a car from Hertz via a car rental broker (AutoEurope / Kemwel) with full insurance for 2 months. It was a small manual economy class car (FIAT Panda / 500) that was suitable for ferrying 2 people. 

On the Ground Expenses

These included visiting tourist sites, groceries, eating out, fuel, buying stuff, etc. This came up to a total of c. S$1,300 per pax per month. 

It was about c. S$950 per pax per month in our first month in Puglia, and rose to c.S$1,650 per pax per month in Umbria. Why is there a remarkable difference here? 

A large part of these expenses stemmed from groceries and ristorante meals. 

During our first month in Puglia, we spent more time at home cooking and less eating out. The ratio of home cooked meals to ristorante meals was probably 2:1. 

This decreased to 1:3 or 1:4 in our 2nd month in Umbria, probably because food and wine in Umbria was so delicious that we decided to spend more time and monies enjoying them, and the cost of living in Umbria is higher than Puglia, roughly by about 20 to 30% or so, which largely explains it.

That said, even the most expensive ristorante meals didn't break the bank. I reckon the most we actually paid for a meal out was c.80 EUR (c.S$120), and that was with the full works that included antipasti, primi piatti, secondi piatti, dolce, cafe and of course vino. 

And we had some really great meals at some great restaurants (especially in Umbria) at such good value that it has shown me that Singapore prices for eating out are really quite over the top. Perhaps more towards that of Swiss prices but without the same standard. Put your hands up for the Swiss standard of living (or rather, prices), anyone? :p 

One case in point was when we hit a famous ristorante in Montepulciano for bistecca. They charged us EUR42 (c. S$65) for a 1.2kg Sirloin, and it was grilled to perfection. I'm not sure whether one can even find such a deal in Singapore's overpriced F&B market, but do let me know if there is a comparable deal available. 

Separately, I found fuel cost to be pretty steep in Italy. The car ran on unleaded petrol (senza piombio benzina) of E5 (think RON95) quality. The cheapest fuel was EUR1.50/l (c.S$2.25/l). I think this is more expensive than Singapore, and possibly the only thing more expensive than Singapore (putting aside gas prices and taxes).  

Diesel was about c.10% to 15% cheaper but though diesel cars cost 10 to 15% more to rent. 

I'm not quite sure whether diesel run cars are more efficient than petrol run cars, but I do know that the FIAT petrol run cars aren't exactly the most fuel efficient ones, when comparing to the usual Japanese / Korean makes. 

General Thoughts

Those two months in Italy were certainly a god send. Amongst other things, it showed me that price and lifestyle arbitrage can also be found in developed countries, perhaps more in the southern and eastern parts of Europe. 

This little jaunt has shown that it is certainly possible to attain European standards of living with lower than Singapore costs of living, especially when  major costs such as housing, transport, and food is cheaper than Singapore. 

In addition, the food was so fresh in Italy, where farm to table seemed to be the standard rather than something to be marketed and sold more dearly. Not to mention the abundant space, fresh air, and warm hospitality. 

We didn't quite venture much into the usual tourist haunts, and were the only Asian couple in a largely European demographic most of the time. Also, our limited , or rather, non-existent command of Italian didn't quite hamper the hospitality we enjoyed, and even in quiet areas in various small towns, there was no point in time where we ever felt unsafe. 

Looking back, I do wish that either one of us could speak Italian. That would have facilitated interactions more easily, and perhaps we could have been able to form deeper connections with our AirBnB hosts, and the people around us. 

That said, I do feel that the only drawback for living such a lifestyle in a foreign land, though while certainly a value play in my book, is that it lacks a viable form of sustained community. 

Sometimes, it's nice to have deep conversations with different people in person. The internet, and wine, can only do so much. 

But maybe I'm just being picky, because I would have done this trip all over again. However, I'll do so with a better grasp of Italian the next time round. :)