Preliminary Plans on Goal 2011

As the year approaches the 3rd quarter finish, some plans are already forming in my head for Goal 2011. The first 8 months of 2010 were good to me, but somehow, plans for next year have started to form in my head by itself. Perhaps I'm a little too impatient :)

For Goal 2010, the paths, strategies, methods, I have taken appeared to be bringing me closer to fulfilling my goals. The work was hard, at times tough, but the result is that I'm closer than ever to achieving my goals set out at the start of 2010. The only exception was ExamWorld, of which I have not updated much due to my hectic schedule.

My plans for coming year are in a way slightly different from 2010, yet in a way, similar. The growth of networth will still be on my checklist, but this time round, there will not be any concrete goals. This is because I will be planning to shift focus to a few things during the first half of the year where my tuition sideline (which is seasonal) will not take up as much of my time as now.

Considerations on Saizen REIT

Caelitus of CNA forums has kindly formed some questions for me to refine my thought processes regarding Saizen. I appreciate that a lot, and I'm posting his questions, and my answers here as a reference.

From Caelitus:
I will write candidly. From what I know, you have 40 lots of the share and 60 lots of the warrant. This is over and above your existing holdings which remain unknown to me. If you were to load more of the mother share, your exposure to this counter is increased compared to that of one where you converted your warrants. The latter brings the amount you committed to the warrants to earn the dividends (productive, de-risking).

Question yourself.
1. What are your rules on risk optimisation?
2. What percentage does Saizen form as a part of your portfolio?
3. As Saizen is focused on the Japanese residential market for 2nd tier cities, what are the opportunities and threats ahead? Deflation, diminishing population, portfolio of freehold properties available for redevelopment?
4. What is the opportunity cost? What about your other targets for dividend play or capital gain? We can look forward to future distributions but Saizen is not bounded by any regulation to distribute 90% of their income. Note the huge bank of warrants which has a very dilutive effect.

AIMSAMPIREIT Rights Issue

AIMS AMP Capital Industrial REIT announces proposed acquisition, new debt facility and fully underwritten renounceable rights issue.

Key Highlights:

• Proposed acquisition of a high-quality industrial property at 27 Penjuru Lane Singapore 609195 (the “Property”) for S$161.0 million;
• New debt facility of S$280.0 million; and
• Fully underwritten renounceable 7 for 20 rights issue to raise S$79.6 million, (collectively, the “Transactions”).

The property being bought is at 27 Penjuru Lane, Singapore 609195, a warehouse and logistics facility.

More details of the purchase can be found here

Why I don't like saving plans

By saving plans, I refer to the plans sold mostly by insurance agents. These are plans that takes a fixed amount every month, and as seen from it's name, save it for you in a special savings account whose interest rate is higher than the bank's interest rate. In return, you are given some form of extremely basic insurance in the event of death, and you are allowed to withdraw a small amount monthly if you need it via vouchers sent to you. One example is NTUC Revosave.

However, there's a catch. The maturity date is 25~35 years later, with perhaps a 1~3% annual rate compounded over the 25~35 years.

To me, the main reason why people buy saving plans are because
(i) Super Duper Conservative
(ii) Financial Ignorance

How I build my income streams

"Multiple sources of income is the way to go!" How often do we hear that, and how well are we able to achieve it? It's a very nice idea and concept, nothing revolutionary, but still out of reach to most people who could only dream of it.

Indeed, it's something easy to say, not as easy as it seems to achieve. As humans, we are limited by the constraints of time and energy. This is the reason why leverage is necessary to reduce the amount of time and energy we need for each income stream. By leverage, I refer to leveraging on the time and energy of others, and also leveraging on the power of technology.

Quick updates

Rather busy, and fell ill. So I shall log down my personal quick views of some of my stocks which has just reported their results.

Starhub
5cts dividend announced.
Net profit fell, EPS drop to 3.39 cts. However, this is because Starhub does not amortize the smartphones sold over 2 years, but recognized it immediately. I expect a much higher EPS over the next few quarters because of this.

A few things to take note for the following quarter:
(i) How loss of EPL will affect its pay TV revenue
(ii) How Next Generation Network will affect Starhub
(iii) How the new law that enables M1 to join the payTV will affect Starhub.

Overall, I will treat this is neutral and within expectations.

The Story of the Marriage Passbook

I was looking through my old emails, and I discovered this interesting mail.
It's very nice and touching, while at the same time, includes the virtue of saving.

Relationship is an investment.  It is wealth in itself.

Enjoy the story:
 
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Marriage Passbook

Jocelyn married William this day. At the end of the wedding party, Jocelyn's mother gave her a newly opened bank saving passbook. With $1000 deposit amount.

Mother: 'Jocelyn, take this passbook. Keep it as a record of your marriage life. When there's something happy and memorable happened in your new life, put some money in.

Write down what it's about next to the line. The more memorable the event is, the more money you can put in. I've done the first one for you today. Do the others with William. When you look back after years, you can know how much happiness you've had.'

Jocelyn shared this with William when getting home. They both thought it was a great idea and were anxious to know when the second deposit can be made.

This was what they did after certain time: